Liquidnet to sign more exchanges after strong Swiss launch

After a successful launch in Switzerland and filing strong performances figures in a year marked by low volumes, block trading venue Liquidnet is set to sign up another three exchanges to its institutional dark pool.

After a successful launch in
Switzerland and filing strong performances figures in a year marked by low
volumes, block trading venue Liquidnet is set to sign up another three
exchanges to its institutional dark pool.

John Barker, managing
director of Liquidnet Europe, told theTRADEnews.com the firm was close to
signing at least two more exchanges in Europe and a major exchange in Asia.

“We continue to diversify our
products and service mix, and are increasingly adding additional asset managers
to our platform,” said Barker. “We’re very strong in the UK and we have a nice
footprint in France, Switzerland and Holland. However, there is great potential
and a real growth opportunity for us in wider continental Europe. We are now
starting to attract asset managers not yet using us across Germany, Scandinavia
and East Europe.”

In July, SIX Swiss Exchange
and Liquidnet launched a non-displayed block trading platform designed to allow
buy-side market participants to execute large trades with one another in both
Swiss and other European equities.

Through the SIX Swiss
Exchange Liquidnet Service (SLS), SIX Swiss Exchange members can direct
executable block orders to Liquidnet, enabling the liquidity in Liquidnet’s
global institutional crossing network to interact with block liquidity
delivered directly from SIX Swiss Exchange members.

In the first two quarters of
2011, with the prior block service, SIX traded around €57 million and €58
million respectively. Since connecting in Q3, Liquidnet has averaged
approximately €1 billion a quarter in Swiss block equity trades and Barker is
expecting to see this grow significantly from such a “modest” beginning in a
year marked by historically depressed volumes.

“We launched in July 2011,
probably the toughest time possible, and have grown ever since,” said Per
Lovén, head of international corporate strategy, Liquidnet Europe, adding that while
Liquidnet had only just started in Switzerland, last week’s figures had showed
that January was already the firm’s best month so far. “We have on-boarded more
than 10% of the exchange’s membership to date, and are continuously increasing
this.”

During the year, Liquidnet globally
saw a 31% year-over-year increase in volume executed through its trading desk.

The venue led the industry in
block trades with an overall average execution size of 48,422 shares in the US
– a 3% increase from 2010. In Europe, the average execution size was US$879,845 –
the largest of any other trading venue in the region. In Asia, where Liquidnet
has connected to 200 of asset management firms, the average execution size was
US$1.2 million, up approximately 11% from 2010.